What is the "fiscal cliff"?

I recently found out that I get cable for free in my apartment, so I hooked it up, and all I've heard for the past few days is the "fiscal cliff". I'm assuming they're talking about whenever the automatic "cuts" go into effect, but why are they calling it a cliff? Nothing is really going to change is it?

It's just their way of scaring people into thinking we need more taxation and higher debt ceilings. You know, because those are the things that keep us off the cliff.

"And now that the legislators and do-gooders have so futilely inflicted so many systems upon society, may they finally end where they should have begun: May they reject all systems, and try liberty; for liberty is an acknowledgment of faith in God and His works." - Bastiat

"It is difficult to free fools from the chains they revere." - Voltaire

It was the deal they cut to kick the can down the road and raise the debt ceiling last time. Because they could not reach a compromise budget, certain spending cuts and tax increses will go into effect automatically.

The proper concern of society is the preservation of individual freedom; the proper concern of the individual is the harmony of society.

It is when taxes go up , unemployment goes up , stocks go down , social security tax goes up 2 %, holiday spending is over , temp holiday jobs are gone , no growth in the economy, the real layoffs start.

Basically the budget is going to be balanced automatically, with tax increases and huge spending cuts. The debate is whether the government can get it together in time to stop it happening.

In New Zealand:
The Coastguard is a Charity
Air Traffic Control is a private company run on user fees
The DMV is a private non-profit
Rescue helicopters and ambulances are operated by charities and are plastered with corporate logos
The agriculture industry has zero subsidies
5% of the national vote, gets you 5 seats in Parliament
A tax return has 4 fields
Business licenses aren't even a thing nor are capital gains taxes
Constitutional right to refuse any type of medical care

This weekend is still a good time to prepare for this impending disaster as gold and silver didn't go up that much this week (a lot of us said last weekend that it was the time to buy some PMs and if this week was any indicator we were right) their corrections are over and I smell a very good month coming for both.

It's just their way of scaring people into thinking we need more taxation and higher debt ceilings. You know, because those are the things that keep us off the cliff.

Exactly. And (of course) they somehow fail to mention that it's those things that created the cliff in the first place. Imagine that.

"A free man must be able to endure it when his fellow men act and live otherwise than he considers proper. He must free himself from the habit, just as soon as something does not please him, of calling for the police." -- Ludwig von Mises, Liberalism (p. 55)

"The evil that a man inflicts on his fellow man injures both - not only the one to whom it is done, but also the one who does it. Nothing corrupts a man so much as being an arm of the law and making men suffer. The lot of the subject is anxiety, a spirit of servility and fawning adulation; but the pharisaical self-righteousness, conceit, and arrogance of the master are no better. [...] The criminal has incurred the penalties of the law, but not the hate and sadism of the judge, the policeman, and the ever lynch-thirsty mob." -- Ludwig von Mises, Liberalism (p. 58) [bold emphasis added]

On January 1, 2013, the Bush tax cuts, which were extended by bipartisan agreement in 2011, will expire. Federal taxes will rise. They will then immediately revert to the taxes we had at the tail end of the Clinton presidency. If no agreement is reached to postpone the end of the Bush tax cuts, the fiscal cliff kicks in on New Year’s Day as we will also have automatic spending cuts.

This will be painful because American taxpayers will see their tax burdens increase and their deductibles decrease. The Tax Policy Center (TPC), a joint project of the Urban Institute and the Brookings Institution, estimates that the toll on US households will average $3,500. We will see our after-tax purchasing power lowered.

More details, also according to the TPC:
- households with incomes between $108,226 and $143,000 will be taxed an extra $6,359.
- households with incomes below $20,113 will be taxed an extra $412.
- The marriage penalty will return on 1/1/2013.
- The child tax credit will be halved (from $1,000 to $500 per child).
- The two-percent payroll tax cuts, the earned income tax credit, and the childcare tax credit are some of the tax breaks scheduled to expire. As well, education tax credits, certain business deductions and credits, and deductions for state and local sales taxes are likewise slated to expire.

Technically, this windfall of new revenue for the federal government would help us reduce our huge annual deficit of over $1 trillion. But if the economy falls into a recession and unemployment rises, tax revenue will shrink, whereas money for unemployment compensation will have to be spent.

It will most definitely be very painful, but it is the right path – it is, as Peter Schiff said, “part of the solution.” We need lower government spending to make the economy improve.

Remember one thing though: if the Bush tax cuts do end after all on January 1, 2013, Obama can’t blame Bush as he has since he won his first term. It will all be on him.

There are two 'fiscal cliffs'. One is the automatic stuff that will happen if the government fails to enact certain spending cuts and/or tax hikes that reduce the defecit spending to a certain preset point. If they don't, certain spending cuts and tax hikes will automatically happen due to a law that was passed a few years ago. Why they call it a 'cliff' we can only guess. My educated guess is that they're trying to obfuscate the other 'fiscal cliff'.

The other fiscal cliff has been mentioned by Ron Paul--he talked about it in his weekly Texas Straight Talk not long ago. This is the point of no return where the only way we can pay the debt by destroying the dollar, an event that won't be good for the economy. Or, if not precisely that, at any rate a worsening of the depression (can we really still call it a 'recession' after over four years?) due in no small part to the fact that the nation is drowning in both debt and excess liquidity and yet still in the middle of a credit crunch.

So, people who not only can see what's going on and are willing to actually warn us about it call it a fiscal cliff, and with good reason--the Fed is setting us up for a real fall. And, next thing you know, these automatic spending cuts/tax hikes are suddenly being referred to by the entire Mainstream Mafia--er, I mean Media--just all at the same time, all using the same term, all spontaneously, as the other 'fiscal cliff'. Hell of a coincidence, huh? They couldn't be trying to obfuscate the coming crash, could they?

Nah. Only conspiracy theorists talk that way....

Originally Posted by The Rebel Poet

You talk of mountains and molehills; I find that ironic. To you, being called names for using unapproved speech is a "mountain," but Edward Snowden, the NSA, the War of Terror, higher taxes, racial profiling, government run healthcare and free housing are "molehills". That sort of confused misprioritazation is exactly what's wrong with Trump supporters.

Originally Posted by acptulsa

When your position is indefensible, a good offense becomes something more than 'the best defense'. It's the only defense.

Basically the budget is going to be balanced automatically, with tax increases and huge spending cuts. The debate is whether the government can get it together in time to stop it happening.

Won't be anything near enough to balance the budget but it does start to move in that direction. CBO estimates say it might if the mandated changes continued untouched for the next decade though. (Like THAT will happen!)

Won't be anything near enough to balance the budget but it does start to move in that direction. CBO estimates say it might if the mandated changes continued untouched for the next decade though. (Like THAT will happen!)

I thought so. I thought I read something where if we wanted to realistically bring down the debt (disregarding how this motion will destroy/destroys our monetary system) that we would have to tax people at least 75% for the next 30 years or something ludicrous like that.

There are three significant parts of the US budget. Social Security. Medicare. and the Department of Defense. It is highly unpopular to cut any of these. If you take them off the table, you have to cut 100% of everything else (well, toss in Interest on the Debt since you can't cut that) and you will still have a budget deficit (it will nearly be gone based on 2009 budget figures http://en.wikipedia.org/wiki/2009_Un...federal_budget . Now if you don't cut anything and want to balance with income taxes alone, you have to double what they currently are. This is the difficult math behind trying to balance our budget and getting rid of the deficit (the debt will still exist and continue grow). A few billion in cuts and a few billion in taxes won't get you there. Cut the spending categories left by 50% and raise income taxes by 50% would just about get you balanced.

When you hear talks about a trillion dollars in cuts, they are talking about is often over 20 years which is only $50 billion a year or barely a tiny dent in the $1 trillion annual deficit.

"I think we never get the candidate we exactly want unless you're the candidate." Rand Paul.